In the United States Fidelity & Guaranty Company v. United States case of 1908, the Supreme Court ruled on a dispute involving a surety company's liability for unpaid taxes owed by its principal. The U.S. government had contracted with E.C. Brown & Co., which was insured by the United States Fidelity and Guaranty Company (USF&G). When E.C. Brown failed to pay certain internal revenue taxes, USF&G refused to cover these debts under their bond agreement arguing that they were not liable for tax obligations. The court held that as per common law principles governing suretyship, USF&G was indeed responsible for covering any unpaid taxes because it had guaranteed all debts due from E.C.Brown & Co., including those arising out of federal taxation laws unless specifically excluded in their contract which wasn't the case here. This decision clarified an important aspect of surety law: when a party guarantees another's debt without specifying exceptions, it is presumed to include all forms of indebtedness - even those imposed by statute such as tax liabilities.

In the dissenting opinion for the United States Fidelity & Guaranty Company v. United States case, it was argued that a surety company should not be held liable for losses incurred due to fraud by an employee of a national bank. The dissenting justices believed that the majority's interpretation of the bond contract between the surety company and bank was incorrect. They contended that such bonds were intended to protect against dishonest acts committed directly against the employer (the bank), rather than fraudulent activities perpetrated by an employee on third parties which indirectly harm or cause loss to their employer. Therefore, they disagreed with holding USF&G responsible for covering losses resulting from its bonded employee's fraudulent actions towards customers, as these did not constitute direct theft or embezzlement from his employer in their view.